Talking Mortgage

twice as much, and that is how bad it is.

The implication of this is that if someone who has taken a mortgage loan is using it to build a house and he is building at a slow pace because his salary remains the same over the period, he will be in trouble because the rate will be rising whereas his income is static. His salary needs to rise at the same geometric progression with the rate for him to be able to cope. This is why experts advocate a legislation towards this process which, of course, depends on how the legislation is applied.

“In other societies, what happens is that you have a body set up that subsidises mortgage. It delivers this either through banks or by itself. In England they call this building society and they do a whole range of syndicating. So, the legislation around mortgage has to be finetuned, implemented and advertised so that people can access it”, Onwuanibe advised.

The structure of the Nigerian economy is another major factor militating against the growth of the industry. According to Onwuanibe,

“the basic principles of mortgage is that you must have steady income and in gainful employment. You must be able to provide income in multiples for the property that will be built for your use.

“If your income is N1 million, for instance, and the cost of the property is N1 million, unless you want to steal, you cannot afford that property because there is no mortgage for you at that rate given your income.”

Given Nigeria’s wide housing demand-supply gap, the country needs to do something quickly to grow its mortgage industry. According to MKO Balogun, CEO, Global Property and Facilities International, “for us to get out of here, the mortgage industry has to improve and developers have to be encouraged to build mortgageviable and ready properties; interest rate has to be reduced to single digit and made available; the whole process of securing mortgage has to be made clearer and more transparent, and mortgage has to be available on the high street such that every time you go out looking for it, you see it”